What does Gerald Gaus tell us about the implications of the knowledge problem for political entrepreneurship?

 

This essay is the latest in a series that I have been writing about political entrepreneurship. It is the second that I have written on the implications of the knowledge problem for the plans of entrepreneurs who seek to improve economic and social outcomes. The first essay discussed Don Lavoie’s contribution to our understanding of the implications of the knowledge problem in that context.

The Complexities of the Open Society

This essay is based on my reading of Gerry Gaus’s final book, The Open Society and its Complexities. Gaus was a prolific author. This book, published in 2021, has been described by Chandran Kukathas as “his most ambitious work”. Gaus adopted an interdisciplinary approach to political philosophy and saw himself as being in “the truth business” rather than a proponent of any ideology. Nevertheless, it is obvious from the book that he valued the norms of liberty of the Open Society and detested authoritarianism and totalitarianism.

Like Don Lavoie, Gerry Gaus was strongly influenced by F. A. Hayek. In The Open Society, Gaus re-considers some of Hayek’s views in the light of developments over the last 20 years in theories of evolution and analyses of societies as complex systems. He focuses on the following three challenges based on his interpretation of Hayek’s views:

• First, do “our evolved moral sentiments constantly cause us to rebel against the Open Society and resort to a “tribal” moral outlook”?
• Second, given that “an evolved complex culture requires fidelity to … evolved norms, what type of justification” of the norms of the Open Society is open to us”?
• Third, has the Open Society “evolved beyond our governance”?

I will provide here just the briefest possible summary of Gaus’s responses to the first two questions.

First, humans “are certainly not inherently groupish creatures”. Humans are “fit for the Open Society”. However, they have not been optimized for it or any other social order, including tribal society.

Second, because the diversity of moral perspectives is fundamental to the moral life of the Open Society, the existence of increasingly diverse moral perspectives can enhance justification of the Open Society. The Open Society is characterized by self-organized social morality, entailing moral rules that lead toward extended cooperation rather than conflict and division. Public justifications of those moral rules must be as accommodating to diversity as possible. Effective governance requires widely justified norms and policies.

Knowledge required for governance

In this essay I focus on the Gaus’s view of the knowledge problem in his discussion of the question of whether the Open Society has evolved beyond “our” governance. He alludes to the knowledge problem when he observes that “we seek to devise policies to improve” the functioning of the Open Society. However, “we do not have the knowledge and competency to do so, hence we are constantly disappointed by the last round of interventions and we blame the last government for its failures and broken promises” (p. 13).

The passage quoted in the epigraph is from page 244, a point in the book where Gaus was summing up his argument. After noting that the passive population model often supposed that people would act against their own judgments, Gaus adds:

“Unfortunately, this view has been resurrected by those elites who continue to believe that the public is too ignorant to make its own decisions, and so should submit to “epistocracy,” or rule by those who know (aka, them). Not only, however, is such expertise essentially nonexistent in complex systems, but most actual agents in the Open Society are anything but passive materials to be guided by the elite: they are active, reflexive agents who make their own choices. When citizens do not endorse a policy, many will employ their resources to evade it.”

In considering whether the Open Society has evolved beyond our governance, Gaus introduces the concept of “self-governance”.  Self-governance is not the same as spontaneous self-organization, although Gaus suggests that the two concepts are not necessarily incompatible.

Self-governance requires that there be a “controller” who collects information at the system level and then uses that information to fuel a decision procedure that plays a role in guiding the systems behaviour.

Gaus refers to those aspiring to be controllers as governors. The roles that governors seek to perform may include the functions of political entrepreneurs. As I have discussed elsewhere, that function includes listening to the discourse of potential customers (supporters) to sense what they are likely to find attractive, and on that basis producing new products (policy proposals) and selling them persuasively.

Gaus considers three levels of governance – macro, meso, and micro- and three dimensions of governance – goal directed, strategic, and rules-focused. A goal-directed governor identifies preferred states and seeks to move society toward them. A strategic governor seeks to solve strategic dilemmas to assist citizens to secure outcomes they all want. A rules-focused governor seeks to structure some of the rules of self-organization.

Gaus’s analysis leads to the following conclusions:

• There is little prospect for a governor to successfully pursue macro-level goals in a complex society. For example, efforts to promote development in particular societies are often unsuccessful because institutions cannot readily be transferred from on society to another.
• Attempts to structure the “rules of the game” at a macro level are more promising. In cooperation with the self-organized normative framework of society a governor may effectively shape the rules of self-organization e.g. via civil rights legislation.
• Goal pursuit at the meso level is a dubious enterprise. Pursuit of environmental, economic and welfare-targeted variables is a hit-and-miss affair because our social world is a complex system. It is not linear and determinate, as is often assumed. Successful goal pursuit in a complex world is usually a matter of “muddling through” (sometimes described as learning-based governance).
• Polycentric governance studies show that a focus on problem-solving tends to facilitate effective governance when publics share pressing strategic dilemmas.
• There may be grounds for more optimism about the prospect for micro governance than governance at other levels.

In writing about micro governance, Gaus makes a favourable reference to the work of Abhijit Banerjee and Esther Duflo. Gaus justifies his optimism about micro governance as follows:

 “When changes come up from the more micro levels, not only are they apt to garner the moral endorsement of actual citizens, but the Open Society will possess a diversity of normative networks. Because what works today may be dysfunctional tomorrow, a diversity of approaches is always critical. This itself upsets the moralist, who believes she speaks for the truth about justice, and sees most deviations from her plan as shades of immorality. But many of the diverse publics will not take up her solutions—many citizens will see different problems and possibilities, and their normative beliefs will lead them to different solutions. (p. 240)

Summing up

In The Open Society and its Complexities, Gerry Gaus provided insights about the circumstances in which political entrepreneurs may be successful in pursuing goals.

Gaus was highly critical of the passive population model which assumes that people will follow policies dictated by governments rather than acting as self-governing agents. Such considerations made him highly skeptical about pursuit of goals at a macro level in a complex society.

He viewed pursuit of environmental, economic and welfare goals as problematic but acknowledged that some success may be achieved by “muddling through” i.e. adjusting policies in response to outcomes.

He was more optimistic about cooperative efforts to modify the “rules of the game” in which self-organization occurs. He also acknowledged that a focus on problem-solving tends to facilitate effective governance when people are confronted by pressing strategic dilemmas.

Gaus seems to have been most optimistic about micro-level governance that is able to garner the endorsement of “actual citizens”.

Why did Aristotle view leisure as a fundamental aspect of a well-lived life?

 

Leah Goldrick answers the question posed above in this guest essay. The essay was first published on Common Sense Ethics, Leah’s excellent blog.

Leah writes:

I've just finished reading Aristotle's Way: How Ancient Wisdom Can Change Your Life, by classicist Edith Hall. It's a great book that I would recommend for my readers, as Hall capitalizes on popular interest in ancient philosophy and substantive self-help. Aristotle addresses the issue of how to live a good life in his Politics, and Nicomachean Ethics, written in the fourth century BC. In Aristotle's Way, Hall codifies Aristotle's most important ideas on how we should live, addressing topics such as happiness, love, communication, and mortality, among others. 

Chapter Seven of Aristotle’s Way is all about Aristotle’s philosophy of leisure, which I think is one of the most interesting chapters, and that's what I'll be writing about in this post. If you want to read a review of the entire book, I recommend this one by Donald Robertson, since I'm focusing on only a part of it here. 

​Aristotle’s philosophy of leisure is tied to his broader understanding of human flourishing. Aristotle thought that most people tend to misuse leisure time if they haven’t learned how to spend it meaningfully, preferring instead to spend their non-working hours on trivial pleasures and amusements. However, learning to use leisure time for growth oriented pursuits can greatly improve our lives. Let's examine that idea in depth in the next sections.  
​

What is Aristotelian Leisure?

​Aristotelian leisure encompasses not just what we might think of as recreational activities today like hobbies and sports, but rather, everything broadly we do outside of work. This includes relaxation after work, eating and fulfilling other bodily functions, and amusements to avoid boredom. It also includes forming relationships with others, enjoying the arts, spending time on exercise and intellectual contemplation, crafts, civic association, and other beneficial and meaningful activities. For Aristotle, leisure isn’t simply about taking breaks or escaping from work; it's a fundamental aspect of a well-lived life.

At the core of Aristotle’s ethics is the concept of eudaimonia, translated as "flourishing" or "well-being." The ultimate human goal is living in accordance with reason and achieving a life of virtue. To reach eudaimonia, one must engage in activities that are fulfilling, meaningful, and promote personal growth. Leisure, in this context, is not a passive activity but is deeply connected to the active cultivation of one's intellect and virtues. In the Nichmeachean Ethics (Book X, 1176b) Aristotle writes: “To be always seeking after amusement is a sign of levity and not of a serious purpose.”

In today’s world, where leisure is often viewed as idle entertainment or seen merely as a break from work, the concept of Aristotelian leisure offers a richer and more profound understanding of what we should be doing with our time; leisure involves reflection, growth, and the pursuit of intellectual and moral development, not just passive distraction. Aristotle argues that leisure is the time in which we can engage in these activities, which allow us to connect to the highest aspects of our human nature. This could include philosophical conversation, artistic creation, or scientific inquiry. These activities are seen as valuable in themselves—not just as means to an end.

In essence, Aristotle’s view of leisure encourages us to think of it as time for self-improvement, exploration, and the cultivation of virtues, rather than merely a time to "rest" from work. Aristotle also believes that leisure is essential for cultivating friendships, which are vital for living a good life. In a sense, leisure time allows for the development of meaningful relationships, as people have time to engage in shared activities that promote mutual flourishing.

Work, Leisure and the Good Life

Aristotle obviously acknowledged that work and productive labor are necessary for survival, and most people in the ancient world that Aristotle inhabited worked tremendously hard. Aristotle also thinks that work can be virtuous if done with the right intentions.

Still, work is secondary to leisure in the Aristotelian sense. Moreover, work should not dominate a person’s life to the point where there is no room for leisure, because without leisure, a person is unable to engage in the activities that lead to personal fulfillment and virtue. Thinking about leisure this way can be a helpful antidote to the burnout many experience in the modern, work-centered culture.

From an Aristotelian perspective, you need not be defined by your job or career, but rather by what you choose to do with your non-working hours. This is good news for several reasons. First, the reality is that only a minority of people are lucky enough to be able to make a living doing what they love. Most of us will have work to get by, but it’s leisure that is truly important for a good life. So, it doesn’t matter if you aren’t totally satisfied with your career.

Best of all, even if you work a lot, you likely have more leisure time available to you than the average person in Aristotle's day. In ancient Greece, everything, even basic chores, had to be done by hand. By contrast, most people in the developed world today enjoy access to modern appliances and conveniences which free up more of our time for meaningful leisure.  

To wrap up the post here, Aristotle thought that how we spend our non-working hours defines who we are, the kind of life we will have, and the type of society we build. From this perspective, our leisure choices are more significant than we may realize. Spending our leisure time meaningfully helps us make sense of the world, experience growth, and contribute to something larger than ourselves. 

If you'd like to learn more about Aristotle's ideas on how to live well, I highly recommend reading Aristotle's Way.  

What does Don Lavoie tell us about the implications of the knowledge problem for the plans of political entrepreneurs?

One of the questions that I have been contemplating in recent months is whether the tariff policies of President Trump could be part of a coherent economic plan. Can his policies be rationalized in terms of revenue raising objectives, the optimum tariff argument, provision of appropriate incentives to manufacturing industries to meet defence or employment objectives, or the pursuit of foreign policy objectives? Is it possible that he is assigning policy instruments to objectives in a manner consistent with a rational plan?

The presumption underlying such questions is that it is preferable for political entrepreneurs to endeavor to ensure that their economic plans are coherent rather than unprincipled, unpredictable, and capricious. Although that may be a reasonable presumption, there is another other option that should be considered. Perhaps it is appropriate for political entrepreneurs to refrain from engaging in economic planning.

I was reminded of that while reading Don Lavoie’s book, National Economic Planning: What is Left?  Don Lavoie was an economics professor at George Mason University, where he taught from 1981 until his death in 2001. This book was originally published by the Cato Institute in 1985 and was reprinted by the Mercatus Center in 2016.

In this book Don Lavoie explains, among other things, that political entrepreneurs are confronted with a fundamental knowledge problem when they seek to plan economic activities, The epigraph quoted above (from page 181) encapsulates an important implication of the knowledge problem.

Lavoie’s explanation of the information problem begins with the insights of F. A. Hayek. The data that a planning agency would require to engage in rational economic planning resides in the separate minds of millions of people. The data exists only in a dispersed form that cannot be fully extracted by any single agent in society. The only way that knowledge can be used effectively is by relying on competitive struggles in a market system.  (p. 56)

The most obvious implication is that it is impossible for markets to be replaced by comprehensive economic planning. However, more modest attempts to steer the market towards particular outcomes also obstruct the source of knowledge which is essential to rational decision-making. (p. 56-7)

Lavoie points out that the only way we can know whether we are squandering resources by over- or underinvesting in microprocessors or steel, for example, is via “the messages contained in the relative profitability of rival firms in these industries”. He adds:

“But this is precisely the information we garble when we channel money toward one or another of the contenders. Deprived of its elimination process, the market would no longer be able to serve its function as a method for discovering better and eliminating worse production techniques. Without the necessity of responding to consumers’ wants or needs, businesses would never withdraw from unprofitable avenues of production.” (p.181)

Lavoie notes that advocates of industry policy disagree on the directions in which the market should be steered. For example, Felix Rohatyn wanted to funnel aid to sunset industries while Robert Reich wanted to funnel it to sunrise industries. He sums up:

“It is the main conclusion of the argument that I have called the knowledge problem … that there are no rational grounds on which Reich could ever convince Rohatyn or vice versa on such matters as are involved in economic change. As a result, such battles are sure to be fought with weapons other than carefully reasoned argument.” (p. 200-201)

Lavoie notes that Rohatyn and Reich both argued that it is the responsibility of a strong leader to coordinate the actions of the rest of us. (p.190) The coordination they had in mind seems to be more akin to the coordination that military leaders impose by giving orders to subordinates than the coordination among individuals that occurs voluntarily and spontaneously in a free market.

Lavoie argues that economic planning is inherently militaristic: “The practice of planning is nothing but the militarization of the economy”. In making that point he notes that the theory of economic planning was from its inception modeled after feudalistic and militaristic organizations. (p. 230)

Some would argue that a degree of militarization is a price worth paying, or even desirable, to achieve a range of national objectives. Indeed, the conventional theory of democracy seems to entail top-down direction. Prior to elections, political leaders tell voters about their plans for education, health, social security etc. and are expected to implement those plans after they are elected.  

I am not aware of anything that Lavoie wrote that discusses the legitimacy of the concept of national objectives and the question of whether planning (and militarization) may be necessary in the pursuit of social objectives. However, he provided a highly relevant discussion of the concept of democracy in a book chapter entitled, ‘Democracy, Markets, and the Legal Order: Notes on the Nature of Politics in a Radically Liberal Society’. (The book is: Ellen Frankel Paul, Fred D. Miller, Jr., and Jeffrey Paul (Eds.) Liberalism and the Economic Order, Cambridge University Press, 1993.)

In that chapter Lavoie notes that Western liberals tend to view democracy and markets “as in some sort of necessary tension with one another”. We tend to think that “taking democracy too far undermines markets and that taking markets too far undermines democracy”. He attributes that view to “liberalism’s gradual drift into compromises with conservatism and socialism”.

Lavoie argues that liberalism needs to reinterpret its notions of markets and democracy so that they are seen to be essentially complementary. Our economics needs to take account of the cultural underpinnings of markets and our politics “needs to move beyond the model of the exercise of some kind of unified, conscious democratic will and understand democratic processes as distributed throughout the political culture”. The force of public opinion is best perceived as the distributed influence of political discourses throughout society rather than as “a concentrated will”.

Lavoie suggests that what we should mean by democracy is a distinctive kind of openness in society rather than a theory about how to elect the personnel of government:

“Democracy is not a quality of the conscious will of a representative organization that has been legitimated by the public, but a quality of the discursive process of the distributed wills of the public itself.” (p.111).

It seems to me that those who see merit in Lavoie’s view of democracy have good reasons to be skeptical about the worth of top-down planning to achieve national objectives. Individuals have different priorities and objectives that deserve to be recognized. National plans cannot solve the knowledge problem entailed in giving appropriate recognition to individual differences. 

Is it too soon to be asking in what part of the world will the next golden age be located?

 

The question posed above occurred to me as I was reading the final pages of Johan Norberg’s latest book, Peak Human: What We Can Learn from the Rise and Fall of Golden Ages.

Johan Norberg is a senior fellow at the Cato institute. He is a historian of ideas and a prolific author. If Norberg has a fan club, I might qualify for honorary membership. I have written about some of his previous books on this blog (here and here) and have read others.

Norberg explains what he means by a golden age in these terms:

“A golden age is associated with a culture of optimism, which encourages people to explore new knowledge, experiment with new methods and technologies, and exchange the results with others. Its characteristics are cultural creativity, scientific discoveries, technological achievements and economic growth that stand out compared with what came before and after it, and compared with other contemporary cultures. Its result is a high average standard of living, which is usually the envy of others, often also of their heirs.”

The author suggests that the most important precondition for a golden age is “an absence of orthodoxies imposed form the top about what to believe, think and say, how to live and what to do.” He doesn’t present the golden ages he has identified in utopian terms. He acknowledges that countries concerned all practiced slavery, denied women basic rights and “took great delight in exterminating neighbouring populations”.

As implied in the epigraph, Norberg argues that civilizations decline when they lose cultural self-confidence. He suggests that episodes of creativity and growth are often terminated because of the perceived self-interest of people who fear change and feel threatened by it. Free speech is replaced by orthodoxies and free markets are replaced by increased economic controls. The fears of those seeking stability and predictability often become self-fulfilling.

 In my view, Norberg has done an excellent job in explaining why golden ages have emerged and disappeared at different times in different parts of the world.

However, I think there may be an omission in the author’s identification of golden ages. I will briefly discuss that before focusing on the question of whether the Anglosphere is in decline.

Identifying golden ages

Norberg discusses seven golden ages in his book. Since he doesn’t provide a summary timeline showing their duration, I asked ChatGPT to construct the following:

• Athens: 480–404 BC
• Rome: 27 BC–AD 180
• Abbasids: 750–950
• Song dynasty: 960–1279
• Renaissance Italy: 1490–1527
• Dutch Republic: 1609–1672
• Anglosphere: c. 1688 onward.

If that timeline is broadly correct, it suggests that the largest gap between golden ages occurred between the end of the golden age of Rome and the beginning of the golden age of the Abbasids. What was happening at that time? Although the golden age of Rome may have ended around 180, following the death of Marcus Aurelius, the decline and fall of the Roman empire took a few more centuries. The last emperor of the Western Roman empire was deposed in 476. Plato’s Academy in Athens apparently continued to function until 532, when the seven last philosophers left to seek refuge with the Persian king. Interest in Greek philosophy grew in Persia during the 6^th and 7^th centuries, partly because of the presence of scholars associated with schismatic Christian sects.

As I was pondering what was happening between 180 and 750, I began to wonder whether India’s golden age might have been worth discussing in this book. While visiting India last year I read William Dalrymple’s book, TheGolden Road: How Ancient India Transformed the World. As well as discussing India’s impact on religion and culture throughout much of Asia, Dalrymple. points out that over the period from about 250BC to AD 1200, India was an important centre of commerce and trade, and an innovator in fields such as astronomy and mathematics.

India was the source of the numerical system with 10 digits including zero, that we use today. Norberg mentions that important contribution, but Dalrymple discusses it at greater length.

Another fascinating topic discussed by Dalrymple is the close relationship between the merchant classes of early India and the Buddhist monastic movement. Dalrymple emphasizes the importance of trade between India and the Roman empire. He notes that as the Roman empire crumbled, India’s trade with Europe was replaced by expansion of its trade with south-east Asia.

Is the Anglosphere in decline?

The Anglosphere refers to those nations where the English language and cultural values are dominant. Few would dispute that over the last couple of centuries the Anglosphere, first led by Britain and then the United States, played a leading role among nations in demonstrating the benefits of liberal democracy, free markets, technological innovation, and free international trade. Life in the Anglosphere has been far from ideal even in respect of those criteria, but there can be no doubt that we have been living in an age of widespread prosperity that is without historical precedent. As Norberg points out, the whole world has benefited from the spread of golden-age conditions fostered by the Anglosphere, with global extreme poverty declining from 38 to 9 percent in just the period since 1990.

However, Norberg notes that “many ominous signs of decline are clearly present in our time”. He mentions the “hubristic overreach” of U.S. attempts to reshape the Middle East through military interventions in Afghanistan and Iraq, the financial crash of 2008, and the growth of “crippling public debt”. He suggests that a series of crises, including the Covid pandemic, have fostered “a sense that the world is dangerous and that we need to protect ourselves from it”. He writes:

“Most worryingly, rich counties have experienced a major backlash against globalization and trade, and immigrants have become scapegoats, just as they were in so many other eras of decline, potentially shutting us out from our most potent source of constant revitalization.”

Norberg notes that both China and Russia “have recently taken a totalitarian turn and are working hard to devastate neighbours”. He suggests, nevertheless, that Russia and China will have a hard time trying to challenge the Anglosphere-led world order because it will be difficult for them to find reliable friends among advanced states. 

Unfortunately, in the short time since the book was written, the government of the United States has adopted an international stance that seems to be inconsistent with the continued existence of an Anglosphere-led world order. Countries that have long regarded themselves as allies of the U.S. are now forced to contemplate seriously how they can best protect their own interests if the U.S. pursues isolationist policies.

The book ends on a somewhat optimistic note. The author observes that there are roughly fifty prosperous, open societies around the world. If one of them fails, “that will not stop others from picking up the torch”. He adds:

“That prompts the question of where the next golden age will come from.”

After considering various possibilities, however, he suggests that “perhaps this is the wrong way to look at it because we now have a “truly global civilization” in which every literate person anywhere in the world can draw upon the accumulated knowledge of humanity and learn skills in any field. In that context, “no one country can hold a monopoly on the ideas that can make them prosper”.

I agree with the general thrust of that argument. The technology required for future golden ages is not deposited in a library that can be easily destroyed. However, the geographical location of societies that are open and prosperous is still an issue worth considering. It isn’t much consolation for citizens in the United States, Britain or Australia to know that their children and grandchildren may be able to draw upon the accumulated knowledge of humanity and learn skills in any field, if institutional change impinges adversely on their incentives to do such things. Opportunities for human flourishing depend on whether political entrepreneurs will restore and maintain sufficient economic freedom.

It is in that context that I ask: Is it too soon to be asking where the next golden age will be located?

I suggested an optimistic answer to that question in Chapter 6 of Freedom, Progress, and Human Flourishing. Looking beyond looming economic crises, I am still optimistic that the governments of most liberal democracies will eventually introduce institutional reforms to enable the drivers of progress to restore growth of opportunities.

What does the Milgram experiment tell us about human nature?

 

I can remember feeling shocked when I first heard about the Milgram experiment. Some psychology students told me about the experiment about 60 years ago, while I was at university.

At that time, the findings of the experiment caused me to question my view of human nature. I was brought up to hold the view that it is natural for humans to be kind and humane. That view is consistent with the derivation of the words, “kind” and “humane”. It is also the view I hold now. The findings of the Milgram experiment seemed to suggest, however, that a less positive view of human nature might be more accurate.

In this post I will summarize the Milgram experiment briefly before explaining why I have changed my mind about what it tells us about human nature.

The experiment was conducted by Stanley Milgram, a psychologist at Yale University. His aim was to explore whether individuals would obey instructions to harm another person when an authority figure told them to do so. The first results of the experiment were published in 1963.

Participants in the experiment were led to believe that they were assisting in a learning experiment in which they were “teachers” who had to administer electric shocks to a "learner" who made mistakes. The electric “shocks” were fakes. The “learners” were actors. They made audible protests in response to the fake shocks. As the voltage increased, the “learners” protested more.

The main finding of the experiments was that a very high proportion of subjects fully obeyed the instructions - 65% were willing to apply the highest shock level. The experiment was replicated several times with similar outcomes being obtained.

When I first heard about the study, the message I took from it was that most humans are horrible. People claim to have regard for the well-being of others, but when it comes to the crunch, most people lack sufficient empathy and/or moral fortitude to refuse to inflict pain on others. The worst part of it was that I wasn’t confident that I would have been one of the minority who refused to apply the highest shock level.

However, when I recently read an article about the study I modified my view of the participants. They didn’t lack empathy for the victims. It was obvious from their behaviour, including symptoms of stress, that they were uncomfortable following the instruction to inflict pain. Every participant paused the experiment at least once to question whether they should continue. In interviews following the sessions, participants frequently described feeling tormented by what they believed they were doing.

Participants only continued because the instructor insisted that they do so. The instructor began by asking the participants politely to “please continue”. If they continued to object, they were told: “The experiment requires you to continue”. If they still objected, they were told three times that they “must continue”.

Milgram’s subsequent experiments showed that obedience was affected by a range of factors e.g. the uniform of the instructor, the location of the experiment, and the presence of social support. In one experiment, two confederates in the room refused to administer high levels of shocks. In that context, only 10% of participants were willing to administer the highest level of shock.

On the basis of his findings, Milgram suggested that the obedient participants were in an “agentic state” where they had allowed others to direct their actions and then passed off responsibility for the consequences to the person giving the orders.

Alexander Haslam and Stephen Reicher have suggested another factor that may explain the behavior of the obedient participants. Rather than simply caving in to orders, they may have believed that they were contributing to a worthy scientific cause.

My conclusion

I am no longer surprised that 65% of participants in the Milgram study ended up doing what the instructor told them to do. They had good reasons to respect the authority of the instructor. They believed they were taking part in a scientific experiment being conducted at a reputable university.

The outcome of the experiment reflected excessive respect for authority rather than a lack of empathy with other humans.

The main point I take away from the findings is that people need to recognize that if they want to behave honorably towards others, they may sometimes need to disregard instructions from authority figures.

The findings of the experiment do not provide a reason to question the view that empathy for others is a characteristic of human nature which is suppressed only under extraordinary circumstances.  

Are declining economic growth rates likely to have undesirable impacts on social attitudes?

 

Research for an earlier essay on this blog led to the conclusion that declining economic growth rates in high income countries are likely to cause an increasing proportion of the population of those countries to feel that their standard of living is worse than that of their parents at a comparable age, and therefore to experience lower average life satisfaction. In this essay I extend that analysis to consider the social attitudes of people in the USA, Britain and Australia who feel worse off than their parents.

In the previous study I used data from the World ValuesSurvey to examine the relationship between the perceptions of respondents about their standard of living relative to their parents at a comparable age and economic growth in the countries in which they reside. That data was then linked to average life satisfaction.

The main findings were:

• Perceptions of standard of living relative to parents are positively related to past economic growth experience of the countries in which people live.
• In the high-income countries, low growth has a greater adverse impact on young peoples’ perceptions of their standard of living relative to parents than on the corresponding perceptions of old people.
• The perception of having a lower standard of living than parents at a comparable age has a substantial adverse impact on life satisfaction ratings.

These findings imply that lower economic growth rates would be likely to result in an increasing proportion of the population having lower living standards than their parents, and hence, lower average life satisfaction. The psychic costs of adjustment to lower economic growth would initially fall most heavily on young and middle-aged people.

Those findings raise questions about likely changes in social attitudes if economic growth prospects continue to decline in high-income countries, resulting in an increasing proportion of people who feel worse off than their parents were at a comparable age. This essay uses World Values Survey data to explore how some of the social attitudes of people who perceive themselves to have a lower standard of living that parents differ from those of the rest of the population.

I focus on three high-income countries – USA, Britain and Australia. The USA survey was undertaken in 2017, the British survey in 2022, and the Australian survey in 2018.

Figure 1 provides further evidence that people in the USA, Britain and Australia tend to have lower average life satisfaction if they perceive that their standard of living is lower than that of their parents.

 

Demographics

Figure 2 indicates that people who perceive themselves to be “worse off” than their parents tend to be concentrated in the 25-54 age groups.

 

Figure 3 suggests that the sex composition of those who feel “worse off” than their parents differs somewhat by age group in the countries considered, but I have no idea why. There appears to be a higher percentage of young women in that category in Australia, a higher percentage of women in the 30-49 age group in Britain and a higher percentage of older women in the United States.

 

Work and Success

Figure 4 indicates that those in the “worse off” category are less likely to agree that hard work brings a better life.

 

Attitude to Migrants and Migration

The only conclusion I can draw from Figures 5 and 6 is that Australians who feel “worse off” than their parents tend to have more negative attitudes toward migrants and immigration than those who feel better off or about the same.

 

Trust

Figure 7 suggests that a lower percentage in the "worse off" category say most people can be trusted.

Figure 8 suggests that a lower percentage of those in the "worse off" category have confidence in the justice system.

Priority given to Freedom

Figures 9 and 10 suggest that there is not much difference between the three groups in terms of priority given to freedom. Slightly fewer of those in the “worse off” category tend to give freedom higher priority than equality. Surprisingly, in Australia and Britain, slightly more of the people in that category tend to give freedom higher priority than security.

 

Government objectives

Figure 11 indicates that those in the “worse off” category are more inclined to want government to take more responsibility to ensure everyone is provided for. The percentages shown are for the top 3 ratings on a 10 point scale.

 

Figure 12 indicates that those in the “worse off” category are less inclined to give high priority to economic growth. Respondents were asked to select from a list which national aim should be given highest priority. Other items on the list include having strong defence forces and individuals having more say in decision making.

 

Politics

Figure 13 suggests that those in the “worse off” category are no more interested in politics than other people in the countries considered.

 

Figure 14 suggests that people in the “worse off” category are no more likely to consider that it is good to have a strong political leader.

 

Figure 15 suggests that people in the “worse off” category are no less likely to consider that democracy is important.

 

Figure 16 suggests that people in the “worse of” category are less likely to be satisfied with political system performance than are people in the other categories.

 

Figure 17 suggests that people in the “worse off” category are as strongly opposed to political violence as are people in the other categories.

 

Conclusions

The social attitudes of people who perceive their standard of living to be worse than that of their parents at a comparable age are similar in many respects to those of people who perceive their standard of living to be better or about the same as that of their parents.

However, there are some important differences. People who perceive their standard of living to be worse than that of their parents at a comparable age are more inclined to:

• Skepticism about hard work bringing a better life;
• Pessimism about trustworthiness of others and lack of confidence in the justice system;
• Collectivism in terms of responsibility for the wellbeing of citizens;
• Negativity about giving high priority to economic growth; and
• Dissatisfaction with political system performance.

That combination of attitudes seems likely to be self-perpetuating because it is likely to promote policy responses that will lead to lower economic growth and a further increase in the proportion of the population who perceive their standard of living to be worse than that of their parents. Adoption of more market-friendly economic policies to facilitate higher economic growth seems unlikely to occur before that course of action becomes more obviously necessary to avert major economic crises.   

Will economic freedom continue to triumph?

 

As I was reading The Triumph of Economic Freedom, the recently published book by Phil Gramm and Donald J. Boudreaux, I wondered whether its title might be too optimistic. The book certainly supports its conclusion that “freedom has been the key to the great progress we have made in the past, and it the key to our progress in the future” (p. 197). However, the impression I was left with is that the authors are not overly optimistic that economic freedom will continue to triumph in America.

The subtitle of the book is Debunking the Seven Great Myths of American Capitalism. In the introduction the authors suggest that current “conventional wisdom” about the desirability of “expanding the government’s role” (i.e. reducing economic freedom) is supported by those myths (pp. xii-xiii). The ongoing triumph of economic freedom will depend importantly on whether enough people understand its merits and are willing to defend it.

Phil Gramm and Donald Boudreaux have both been staunch defenders of economic freedom over a long period. Phil Gramm is an economist and former politician. He represented Texas in both chambers of the U.S. Congress and, at different times, served as both a Democrat and a Republican. Donald Boudreaux is an economics professor at George Mason University and a senior fellow at Mercatus Center. He has vigorously sought to make economic issues, particularly issues surrounding international trade, understandable to a broad audience. He has used his Café Hayek blog for that purpose for over 20 years.

My aim in this essay is to draw on The Triumph of Economic Freedom to consider where anti- market myths come from and who defends them.

Myth 1: The industrial revolution caused a great deal of misery.

This bleak assessment dominates conventional wisdom and popular literature to this day, yet the authors point out that it is refuted by “every major measure of material well-being”.

The myth seems to have its origins in the fact that poor people become much more visible when they move from the countryside in search of a better life in factory work in urban areas. Victorian literature, particularly the novels of Charles Dickens, paint a “worst of times” portrait at the end of the Industrial Revolution.

There has been debate among economic historians about the point at which average real wages actually began to rise in England during the 19th century (even some discussion on this blog) but there can be no doubt that the industrial revolution was the beginning of a golden age of material well-being.

Why does the myth persist? Those who wish to question the merits of free markets still see it as a useful narrative for their purposes (which may include encouraging opposition to imports from “sweatshops” in developing countries).

Myth 2: Progressive era regulation in the U.S. was necessary to meet the threat posed by corporate monopolies.

This myth seems to have had its origins in the inability of many small, local firms to withstand the competition of economic giants serving the national market. These corporate giants contributed to widespread growth of economic opportunity, but their competition was portrayed as harmful by interest groups and politicians seeking greater control of the economy.

This myth is still to be found in leading history textbooks. It is still a useful narrative for those who promote a new progressive vision for regulation of tech giants.

Myth 3: The great depression was a failure of capitalism.

Gramm and Boudreaux suggest: 

“When failed government policies produce a crisis, government blames capitalism and then uses the crisis to expand the very powers that initially caused the crisis” (p. 193).

Some prominent economists who prefer market failure explanations to government failure explanations certainly helped governments to do this. Advocates of market failure put forward some explanations of the depression that appeared to be plausible e.g. the idea that free market capitalism has a tendency toward under-consumption. Gramm and Boudreaux point out, however, that the long period of economic growth after the end of World War II, following restoration of “a largely free market”, testifies against theories of underconsumption (p. 80).

Myth 4: The myth of trade hollowing out American manufacturing.

This myth has its origins in the decline in employment in manufacturing as a percentage of total employment. As Gramm and Boudreaux point out, as part of the economic growth process, advances in technology eliminate jobs in manufacturing (as in agriculture beginning at an earlier point) and create jobs in the service sector. This process enables wages and other incomes to rise.

Import competition is blamed because nationalism is “always a powerful force than can be tapped to stoke support for protectionism, and significant benefits can be granted to a small number of economic interests, with the costs spread almost imperceptibly across society as a whole” (p. 193).

Myths about international trade persist because the roles of economic freedom and technological progress in the economic growth process are poorly understood by most citizens. Few economists support protectionist policies.

Myth 5: The myth that deregulation caused the financial crisis of 2008.

The central element of the myth is that financial deregulation enabled banks to “recklessly gamble depositors’ funds in securities markets”.  Gramm and Boudreaux point out that government “regulatory policy pressured banks to make bad loans”, “forced government-sponsored enterprises to purchase and securitize those loans”, and “manipulated financial institutions’ capital standards to encourage banks to hold massive quantities of mortgage-backed securities” (p. 193).

As with the great depression, this is another example of government causing a crisis and then creating a myth to suggest that the crisis occurred because of insufficient government regulation.

Myth 6: The myth that income inequality in America is high and rising on a secular basis.

Gramm and Boudreaux point out that this myth has its origins in reliance on official Census Bureau data which fails to count two-thirds of transfer payments. When appropriate adjustments are made to the official figures, the ratio of average household income in the top quintile to average household income in the bottom quintile falls from 16.7 to 1 to 4 to 1, and the appearance of growth of inequality disappears.

The idea that income inequality is high and rising in America is so ingrained in conventional wisdom that I had some difficulty accepting that it is a myth. However, the authors have presented a persuasive argument based largely on research by John Early, who was formerly assistant commissioner at the Bureau of Labor Statistics.

The Census Bureau apparently includes footnotes in its publications to acknowledge the limitations of its measures of household income, but it is difficult to understand why it has not produced more accurate measures.

Myth 7: The myth that poverty is a failure of American capitalism.

The authors argue that poverty is a failure of U.S. government rather than free markets. The growth of welfare payments has diminished labor force participation to such an extent that it has largely delinked the bottom quintile of income earners from the economy. The authors suggest that by making the poor dependent on the government the welfare system has severed their “avenue for success and personal achievement”.

The authors suggest that the current welfare system might serve “the political interests of the government” rather than the interests of poor people.

Discussion

The common element in many of these myths is a lack of understanding of the spontaneous forces of a free market, in combination with a planning mentality, and a tendency to overlook the potential for deliberate government controls to have unintended adverse consequences. Another common element is the activity of interest groups that have an incentive to create and perpetuate myths that advance their interests at the expense of others.

Lack of understanding of spontaneous forces poses a particular problem in the context of economic change. As Friedrich Hayek noted, in the context of complex spontaneous orders, it is not possible “to predict the particular changes that any event in the environment will bring about”. He suggested that this “ignorance of how the mechanism of the spontaneous order will solve such a ‘problem’ … often produces a panic-like alarm and the demand for government action for the restoration of the disturbed balance” (LLL, v1, p. 63).

Hayek went on to note that when it is possible to foresee how market forces are likely to restore the disturbed balance, the situation can become even worse:

“The necessity of adaptation to unforeseen events will always mean that someone is going to be hurt, that someone’s expectations will be disappointed or his efforts frustrated. This leads to the demand that the required adjustment be brought about by deliberate guidance, which in practice must mean that authority is to decide who is to be hurt” (LLL, v1, p. 63).

How can anti-market myths be debunked? I can’t think of a better way than via publications such as this book by Phil Gramm and Donald J. Boudreaux, who are following in the footsteps of Frédéric Bastiat. I hope that their book will be widely read in the U.S. and in other countries (including Australia) where anti-market myths seem to be even more widely accepted.

It seems appropriate to end this essay by quoting in full the paragraph by Frédéric Bastiat from which the epigraph was extracted:

“By the dissemination of knowledge, by enlightened discussion of cause and effect, to bring public opinion back to the intelligent attitude that condemns bad tendencies and resists the adoption of harmful measures, is to render a great service to one's country. When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe” (Economic Harmonies, 1850).

Why do scientists politicize science?

 

Source for graphic: Dan Kahan, 'What is the science of science communication', Journal of Science Communication, 2015 

This is a slightly edited version of an essay I published here about 10 years ago. It raises issues that are worth thinking about further at this time.

When I hear scientists engaged in policy advocacy I often cheer them on. At other times I make cynical comments questioning whether their conjectures have any substance. I notice that other people seem to have similar reactions, but some jeer when I cheer and vice versa.

In thinking about my own reactions I am able to rule out some possible reasons for negativity without much difficulty.

Expertise: My reactions are not always closely related to my own expertise. I can react positively or negatively to scientific advocacy in relation to areas of public policy in which I have no expertise as well as in aspects of economic policy where I can claim some expertise.

Conservatism: My reactions do not seem to be consistently conservative in the sense of being cautious about change. Sometimes I feel that scientists are setting out to make me worry unduly about the implications of our current lifestyles, but I am less inclined to feel that they are trying to make me feel more complacent than I should be about potential adverse effects of various innovations e.g. GM food or health effects of living close to power lines or wind farms.

Research funding: My reactions are not necessarily related to the question of how the scientists fund their research. In some instances I might suspect that they are advocating in the interests of the people who have provided funding, or slanting their presentations to further their interests in obtaining more funding, but such factors are not always relevant.

Indoctrination: My reactions are unlikely to be the result of indoctrination by particular branches of the news media. I am exposed to a range of media organisations with a range of different biases.

I had to think more carefully about whether my reactions could be related to the presentation skills of the scientists. I know I have a strong allergic reaction to being preached at or manipulated. So, I took a look at Jason Nazar’s 21 principles of persuasion and some other web sites discussing the art of persuasion. In the end I realized that I don’t have too much difficulty these days in being able to appreciate the persuasive skills of speakers while disagreeing with the messages they are presenting. I can also support the message being presented by speakers while thinking they could do with some help to improve their presentation skills.  Membership of Toastmasters encourages people to think about such matters.

It was not until I stumbled on an article by Dan Kahan on the science of science communication that I realized that the reactions that people have to advocacy by scientists might be related to Bryan Caplan’s concept of rational irrationality and Jonathan Haidt’s moral foundations theory (which have previously been discussed on this blog). Caplan suggests that people can have an almost religious attachment to irrational beliefs about economics, while Haidt suggests that identification with groups tends to blind people to the wisdom of people outside those groups.

Cutting to the chase, Kahan tests the performance of two hypotheses to explain why there is so much public dispute over science-based conjectures about the risks that humans are facing. The first thesis, the public irrationality thesis (PIT), predicts that the gap between public and expert assessments of risk narrows as members of the public become more literate about science. On that basis, people who scored highest on science comprehension could be expected to be more concerned about climate change than those with lower scores. However, this doesn’t happen - at least it doesn’t happen in studies cited by the author.

The second thesis, the cultural cognition thesis (CCT) posits that certain types of group affinities are integral to the mental processes ordinary members of the public use to assess risk. Kahan cites various studies that have tested CCT, but the results of one which tests CCT head-to-head against PIT are particularly interesting. The results show that on issues that have become politicized – such as global warming and fracking – the average divergence between risk assessments of people who identify as liberal democrats and conservative republicans is greater among those who have high levels science comprehension than among those who have low levels of science comprehension. (See chart at the top of this essay.) The results suggest that individuals who are most adept at scientific reasoning search out evidence to support their political dispositions.

The study suggests that there is little difference between risk assessment of liberals and conservatives on issues that have not become politicized e.g. artificial food colorings, exposure to radio waves from cell phones, GM food, exposure to magnetic field of high voltage power lines, use of artificial sweeteners and nanotechnology. The PIT thesis does apply to such issues. I guess the results might differ in countries where some of these issues, e.g. the risks associated with GM food, have become politicized.

So, in the light of the above, how should I react to the Earth Statement recently published by a group of eminent scientists which suggests that “2015 is a critical year for humanity” and predicts dire consequences if international forums to be held this year decide to postpone substantial reductions in greenhouse gas emissions? Let me quote a paragraph:

“We can still avert dangerous climate change. However, we are currently on a warming trajectory that will leave our world irrevocably changed, far exceeding the 2°C mark. This gamble could propel us into completely uncharted waters, with unmanageable sea-­level rise and a vastly different climate, including devastating heat waves, persistent droughts and unprecedented floods. The foundations of our societies, including food security, infrastructure, ecosystem integrity and human health, would be in jeopardy, impacting most immediately the poor and vulnerable.”

My immediate reaction was along the lines that they would say that wouldn’t they. Those who preach about the end of the world can always be expected to tell us to repent now for the end of the world is nigh. Would you expect them to say that it is now too late to do avoid catastrophe, or that there is no need to worry much for the next 20 years or so?

I claim no expertise in climate modelling, but the little I know suggests to me that current models are not reliable enough to tell us that it is critical that further action be initiated in 2015. Such claims seem to me to be more like hysteria than science.

So, why don’t scientists take more care to avoid politicizing science?